Stryker (SYK) Q1 2026 earnings summary

Executive summary

• Q1 2026 results were significantly impacted by a late-quarter cyber incident, causing operational disruptions and revenue recognition delays across business units, but the company quickly recovered and reaffirmed full-year guidance.

• Net sales rose 2.6% year-over-year to $6.0 billion, with organic net sales up 2.4%.

• Reported net earnings increased 13.9% to $745 million, and reported EPS grew 14.2% to $1.93, while adjusted EPS declined 8.5% to $2.60.

• Recent M&A activity includes the announced acquisition of Amplitude Vascular Systems (AVS), expected to close in Q2, expanding the cardiovascular portfolio.

• Organizational changes include the launch of the Ortho Tech business and updated segment reporting to reflect internal structure.

Financial highlights

• Organic sales growth was 2.4% year-over-year (1.9% U.S., 3.9% international), constrained by the cyber incident.

• Adjusted EPS was $2.60, down 8.5% from Q1 2025, driven by limited sales growth, lost manufacturing absorption, tariffs, and higher interest expense.

• Adjusted gross margin was 63.6%, down 190 bps year-over-year, mainly due to production shutdowns and tariffs.

• Adjusted operating margin was 21.1%, down 180 bps year-over-year.

• Cash from operations was $581 million, reflecting seasonal outflows and cyber incident impacts.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: organic net sales growth of 8%-9.5% and adjusted EPS of $14.90-$15.10.

• Most Q1 lost sales expected to be realized over the remainder of the year, with recovery cadence varying by business and product type.

• Adjusted other income and expense expected to be ~$420 million for 2026; effective tax rate guidance remains 15%-16%.

• Margin guidance unchanged; expect to deliver on full-year margin targets despite Q1 headwinds.

• Foreign exchange expected to have a slightly favorable impact if rates remain stable.